02/May
Jack Stephens
Published in post

What the evidence says about the economic impact of immigration

As waves xenophobia sweep across the developed world, a similarly alarming claim has gained steam. While the conversation is not a new one, an energized attempt to paint legal immigration as detrimental to developed countries has begun to take root.

Take the United Kingdom and the United States for example. These are two of the most successful examples of functioning democracy in World History, both with a history complex yet rich with immigration and the invitation of foreign peoples.

It was the founders and philosophers of these democracies who first raised the question of immigratory impact. From John Locke’s defense of The Edict of Nantes, when he urged developing kingdoms to “open (their) doors… secure of the advantage” that they will reap the “profit of (the immigrant’s) labor”; to John Stuart Mill’s insistence that legal immigration was “one of the primary sources of progress” in a society, the philosophic and academic defense of such policies has long echoed in the halls of Westminster.

America, in addition to its character as a nation born from the immigration of peoples, has long represented a beacon for legal, productive immigration. From Washington’s promise that “the bosom of America is open to receive the stranger” to James Madison’s assertion that immigration serves “to increase the wealth and strength of the community”, a defense of welcoming immigration policy is not unfamiliar within the chambers of Washington either.

Yet still, critics claim that in an international system more globalized and interconnected today than ever before, governments must implement policies that protect their people from the threats that immigrants pose to the employment of their citizens, their systems of welfare, and prominently, their wages. ‘These examples of hopeful rhetoric in history are nothing but the idealistic musings and meanderings of now ancient and irrelevant men’…they insist.

However, despite the volume of their claims and the strategic means by which they hope to convince the public, the concept of robust legal immigration as a burden to domestic economies rings just as hollow as it ever has. Mainstream academic research has continued to support the notion that immigration is not only harmless to the domestic economy which supports it, but that it is in fact almost always, unilaterally advantageous.

In Britain, a recent study found that between 1995 and 2011, when comparing the share of cost of government spending and the financial contributions of immigrants in the UK, the result is a net of +£4 billion. Moreover, immigrants to the United Kingdom are 8% less likely to claim any type of state benefits or live in publically funded housing than are British natives. In fact, more often than not, immigrants to the UK contribute wholly and honestly to the welfare system through consistent taxation, but most often return to their native country at an elder age, before they ever even reap the benefits of that system.

In America, empirical analysis has similarly and consistently illustrated the fact that immigration has in fact, had a long term positive effect on wage growth and employment for native populations. Strong levels of immigration have historically been tied to increased production across sectors of the economy. Perhaps an increasingly evident theme is that of innovation and research becoming driven by strong immigration trends. According to a 2011 survey, half of the top 50 venture capital firms in America have at least one immigrant founder and roughly three fourths of these organizations have employed an immigrant in a top management or research position.

When presented with facts such as these, critics and “skeptics” of legal immigration retreat to a range of defenses. Anecdotal evidence has become popular. They recount the cousin of theirs who knows someone who lost his job to an immigrant, willing to work for less. They bemoan the immigrant woman who lives down the street and sits on her porch, uninterested in finding work, “leeching” off of the state’s welfare system.

Further, an increasingly common defense of protectionist immigration policies has developed from a rediscovered love and ignorantly unilateral investment in the idea of the universally autonomous nation-state. They claim that in order to “take their country back”, immigration must be curtailed (notice the argument has abandoned an attempt at economic justification). They reference past leaders such as Benjamin Franklin or William Evans Gordon who warned against the harms of immigration and the threat that immigrant culture poses to native peoples.

But wait, are those not just the musings and meanderings of now ancient and irrelevant men?

Jack Stephens

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